Japanese Enter E-Cash And Online Lending Market In Indonesia

Indonesia, a country where millions of people don’t have bank accounts and therefore cannot pay with other means than cash, is stepping up its e-money ambitions. In a latest move, a Japanese lease and finance company, Tokyo Century, entered the market through a partnership with local retail conglomerate Lotte Group in order to develop a digital payment and lending business for the country.

The Japanese invested about 13 billion yen ($115 million) for a roughly 20-per cent stake in an e-cash unit of Lippo Group, whose operations comprise department stores, shopping malls, hospitals and various other businesses.

Lotte Group already made a full-scale entry into the e-cash business in summer his year by launching a smartphone-based service that lets users shop with e-cash and accumulate shopping points. The service, called OVO, is expected to attract 8.5 million users by the end of next year, which seems to have made a business case for Tokyo Century.

Tokyo Century and Lippo Group will also establish a consumer loan joint venture by the end of the current fiscal year through March and work toward developing a new consumer credit business model for Indonesia.

Just around 40 per cent of Indonesians have bank accounts, and fewer than en per cent of them have a credit card.

Tokyo Century aims to create a mechanism that makes it possible to determine OVO users’ creditworthiness through big-data analysis of their e-cash and shopping point usage. The Japanese company aims also to invest in a Lippo Group online shopping unit, gaining a foothold in payments for online retail.